Hi I’m wondering if VPs can typically afford to rent a 10k a month apartment in NYC?
A first year VP in my group recently stated to us that he pays 10k per month on rent. We’re at a lmm bank and I heard this level usually gets around 200k base and 100k bonus per year. VP also stated he is single, no other income.
I am trying to do the math to see how this would be affordable, but I am not sure.
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Uhh… what LOL what percentage of his monthly income is that?? Sounds really high
It's steep but not insane. Rent typically is 25-30% of your income so they are certainly paying for a premium at 40%. However, you do not know how well they budget other expenses and if housing is where they splurge.
after tax its over 80% of his base...
True - I am not saying this is the financial decision I would make. But we know how expensive NY is and they could have a spouse/kids.
That’s wild. The associates in my group typically make around that and most of us are renting a 3-4k/month apartment.
Lol I come from a country where rent is 1k per month for a 3 bed. This is wild that someone would pay 10k a month for probably just a 2/3 bed in ny
Hey man to each their own. Yes, that’s definitely quite high as a percentage of income but not completely insane. That’s somewhere around 200k net, so it would be around 50% towards rent.
For context, I made about 160k as an a1 and netted around 95, and spent about 40% of that towards my rent. I also spent about 30k on dining, drinks and other fun stuff, so saved about 20-30k.
Lol why this get MS? That’s p normal spending for that pay range
New VP told me his apt costs ~$8.5k in rent a month. It's pretty sick. Don't work in NYC but in a larger city.
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A1 at EB - confirmed not able to pay $10k/mo on my salary. I'm paying 1/3 of that and it's brutal
i'm a VP 3 at an EB. I *could* spend $120,000 annually to rent an apartment. I wouldn't do so absent a lobotomy though
That actually sounds insane. A new first year VP hasn’t even gotten his bonus yet, which isn’t necessarily always the same every year, so he’s really just on 200k base salary
VP3 - it's insane to use your bonus portion of comp to budget for day-to-day expenses like rent. My base is $275k, after tax, insurance, and maxing out my 401k, I make about $13k a month in NYC. $6k of that goes to rent but I get one month free at end of lease so more like $5.6k. I get a cleaner twice a month and that costs me around $300, power maybe another $200, parking is like $625 which is a nice luxury. So my total all-in on housing on a net basis is around $6.8k. I would consider my rent/housing expenditure middle of the road; neither frugal nor lavish. I pay for a small two bedroom in a nice area of Brooklyn and use the second bedroom as an office.
You have parking in your building?
He must make more than you estimate, maybe from some other source. That’s very steep for that range of comp. I do my personal estimations and budgeting on my base salary, not including any bonus or carry. Currently spending 25% of pretax base which feels like a reasonable level for a nice area in Manhattan.
In situations like this there is always family money involved
I met a guy in IB in NYC and he was a VP at the time and said his rent was $9,800 per month. This guy also owned a restaurant / wine bar and he laughingly said he got $10K per month from the restaurant "to cover his rent." Most of the staff was well trained and he just had to supervise for a few hours every couple days. It was a booming / trendy place. I met him at the restaurant. He was good friends with my friend so we talked over the course of a couple hours and I learned all the details. Lucky SOB.
How'd he get into the business?
Uh, you know that 10K spilt 2 ways is 5K right? What are the odds some dude was renting a 2 bed all for himself?
Rich parents/inheritance ? It’s nyc, a lot of people are on mommy and daddy’s dime at all age groups. Know several.
This.
A significant proportion of people you meet in NYC are secretly being financed by the Bank of Mom & Dad or through trusts created by the Bank of Mom & Dad. In my analyst class I would say 30%-40% were receiving some kind of financial assistance from their parents.
I mean this sounds pretty doable as long as he doesn’t tip the landlord. Only at that point would he get into trouble.
He sounds like he’s living a little beyond his means but maybe he has some savings from when he was an analyst and associate
Are you a bot?
Some people don’t have losers for parents, they have successful ones that continue to help them through life. Don’t project your crappy financial situation on your VP just cause your family can’t help.
What a terrible take. Shame on you.
If you have kids and a wife that also works, it's not unreasonable in a T1 city.
Agreed that if you have a spouse that also works then that is quite reasonable.
However, it looks like the VP described is single and does not have other income based on the post.
No - an annual base salary of $200k while being single would not support monthly rental expenses of $10k. Even with $100k bonus expectations that would still be irresponsible.
You should not be renting based on what your expected all in comp could be if you haven’t received that amount given that in some years, bonuses could vary and be lower than in other years.
What if you also have a fat trust fund???
Then his income would be much higher than 300k and would be able to afford that, but my response was assuming OPs VP was not in that category, as the original post states no other income
Some people had help buying starter apartment and later on they rent it out to rent a nicer apartment, so the net out of pocket may not be that high.
I do not understand how some one could be spend such large monthly rent for an apartment, which many seem to be small in New York.
I can see the rent can be covered by his stream of income, which is good.
From my calculation, the VP will likely not have much savings left over for other costs like food and vacation based on his base salary. I am wonder if people can take on other job like driving for the Uber on the weekends or working at a chick-fil-a
Yeah these days if you want to get a part time job for supplemental income, there are good options available for you. A few years ago, before I started my analyst job, I was a tutor for exam prep programs and I also taught Spanish courses online given that it is my native language.
Definitely not small - you can get a 2k sqft place in Tribeca or a 5-bed in Park Slope for that price
It's pretty crazy how nyc rent prices are this high, and even crazier that people on 200k base will spend that much on rent.
Yes, your VPs salary does in fact cover the rent expenses, but he is completely irresponsible and lacks sound judgement regardless - I would want to ask how he even think of this idea to begin with, but he would likely struggle to come up with a coherent response
I pay ~8.5k / month. Planning on buying soon, though. Having a girlfriend in a non-volatile-comp career that guarantees several hundred 000 of guaranteed income (for ex: my HF base is 150-200k, and her all in come is comfortably 250-300k, which is more than enough to cover a big rent/mortgage, therefore my HF bonus is entirely incremental)
Think that’s the most stress-free way to think about it.
Ah yes that’s the move
I’m not a financial advisor but I would advise to not spend 120k on rent on a 200k base salary
At OP, I have a saying "people will tell you what they have, but not how they go it', meaning, there are multiple ways to obtain items; buying it with money you earn, getting it as a gift, getting inheritance, having a second job. People won't tell you they get money from their relatives or inheritance, but they will tell you about their luxury apartment, just how it works.
Moral is, don't compare yourself to others. A number of games I play in my head (how my friends afford their lifestyle, how this business stays solvent, where people draw the line) it is interesting how people use their money or obtain things; but that's why we have a lot of people in debt in this country. Que the Paul Bettany Margin call explanation.
Nice, I knew someone paying around that as a student in art school
Lol wtf why? Was this in nyc?
Yes. He wasn’t very bright
Maybe times have changed, but when I was in NYC brokers/landlords would not work with you unless you could prove you made 30x times the rent of whatever you were looking at, or had a guarantor that makes 150x.
Once you have few years of w2 nobody just looks at base bc it quickly becomes ridiculous when you make 700-800k with 250-300k bases and can't afford anything. I speak from experience having recently looked for apts and every single landlord was fine except one who asked a question and then was also fine
Are you MD now? Yeah rent and housing costs have increased a tonne relative to salaries over the past several decades.
Maybe times have changed but your VP sounds like a dumas 🤣🤣
Lol why did this comment get MS? Maybe your post should've said something like:
"Oo wow, your VP sounds so smart for doing that, he should get a pay raise for his decisions"
10K a month is more than enough for a mortgage. You have to be pied a terre rich for that lifestyle.
A mortgage? Let’s say a person’s base salary is 200k, how much mortgage can they borrow?
NYC can be pretty pricey, but with a base of 200k and a 100k bonus, it's technically doable. The key is budgeting and making sure you're not overspending in other areas. Plus, being single can make it more manageable since you don't have to worry about sharing expenses.
It’s generally fine if have good savings but a bit high. It’s like asking if you’d be able to take on 10k in mortgage interest at 200k base
If he’s getting mad action at the pad then could be worth it.
Yeah f*ck you OP - I happen to also want to live in a 10k / month apartment, right now I’m living in a studio for 2.5k/month and it sucs
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